Farage: more Grillo than Griffin

UKIP is the British version of a Europe-wide rejection of mainstream, established politics.

For many, UKIP’s success in the county council elections last week is the latest in a string of stunning results for the extreme right across Europe. Parties that reject multiculturalism and the EU in favour of more assertive nationalism are growing in popularity, and Nigel Farage’s party is the UK edition: BNP-lite, a radical right wing party that appeals to the electorate’s dislike of the European Union and fears about immigration.

But there is another – unlikely – political insurgent that Farage shares more in common with than Nick Griffin: the radical comedian-turned politician from Italy, Beppe Grillo. Both are best viewed as primarily anti-establishment populist movements, neither obviously left nor right-wing.

Populist parties pit the good, honest, ordinary voter against the out-of-touch, liberal, mainstream political elite. They claim to represent the former against the latter, an authentic and common sense voice in a world of spin and self-interest.

It is not the extreme right that is on the march across Europe, but a much wider rejection of mainstream, established politics. Sometimes that takes the form of Marine Le Pen or Geert Wilders. But the economic crisis is also lifting the anti-mainstream left, such as Mélenchon in France, Syriza in Greece and most obviously Beppe Grillo in Italy.

Of course, on several specific policies they are a world apart. Grillo is furiously anti-austerity, and is passionate about green energy. But for both, specific policies probably matter less than the broader line that politics is dominated by a identikit group of cosseted elites whose ideas can be separated by a cigarette paper.

Self-interested and self-perpetuating, they have forgotten ordinary people, and cannot be trusted. Because the European Union is especially distant and unaccountable, both Grillo and Farage want out, with democratic power being wrestled from the Eurocrats and handed back to the people.

Beppe plays the outsider: he proclaims that political parties are finished, and calls Berlusconi a "psycho sex dwarf’. Mr Farage, you may have noticed, increasingly talks about "the professional political classes", rather than Europe, often with pint in hand. As the academic Rob Ford as pointed out, immigration is far from the main concern UKIP voters have.

Similar too, is their support and sudden prominence. Both UKIP and Grillo’s party scored around 25 per cent in their respective elections this year, and this is because their approach to politics and assessment of the problem strikes a very large chord. According to the 2012 Eurobarometer poll, 82 per cent of UK public "tend not to trust" political parties; 77 per cent "tend not to trust" the national government.

Membership of political parties has evaporated (there are now three times more Twitter followers of Tory MPs than there are formal party members). The disenchantment reaches into the broader establishment too: 45 per cent of us "tend not to trust the justice system" and 79 per cent "tend not to trust" the mainstream media. The scores in Italy are remarkably similar.

As with most political terms, 'populism' is malleable, elastic. It is sometimes deployed to discredit, describing an overly simplistic form of politics which stirs up emotions and directs it unfairly at (usually foreign) scapegoats. Equally though, it can be an important check on politics that gets too far out of sync with those it is meant to represent, a sort of democratic nudge. Often it is both.

Either way, with turnout falling, especially in local and European ballots, winning elections is increasingly about mobilising voters. Any party presenting a radical alternative to the status quo has avery large potential support base. Throw in modern tools of communication – both Beppe Grillo and another outsider-populist George Galloway used social media to communicate and get their vote out – and UKIP-like results will become more common. Farage called it a sea change. He is probably right.

"Farage increasingly talks about 'the professional political classes', rather than Europe, often with pint in hand." Photograph: Getty Images.

Jamie Bartlett is the head of the Violence and Extremism Programme and the Centre for the Analysis of Social Media at Demos.

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Q&A: What are tax credits and how do they work?

All you need to know about the government's plan to cut tax credits.

What are tax credits?

Tax credits are payments made regularly by the state into bank accounts to support families with children, or those who are in low-paid jobs. There are two types of tax credit: the working tax credit and the child tax credit.

What are they for?

To redistribute income to those less able to get by, or to provide for their children, on what they earn.

Are they similar to tax relief?

No. They don’t have much to do with tax. They’re more of a welfare thing. You don’t need to be a taxpayer to receive tax credits. It’s just that, unlike other benefits, they are based on the tax year and paid via the tax office.

Who is eligible?

Anyone aged over 16 (for child tax credits) and over 25 (for working tax credits) who normally lives in the UK can apply for them, depending on their income, the hours they work, whether they have a disability, and whether they pay for childcare.

What are their circumstances?

The more you earn, the less you are likely to receive. Single claimants must work at least 16 hours a week. Let’s take a full-time worker: if you work at least 30 hours a week, you are generally eligible for working tax credits if you earn less than £13,253 a year (if you’re single and don’t have children), or less than £18,023 (jointly as part of a couple without children but working at least 30 hours a week).

And for families?

A family with children and an income below about £32,200 can claim child tax credit. It used to be that the more children you have, the more you are eligible to receive – but George Osborne in his most recent Budget has limited child tax credit to two children.

How much money do you receive?

Again, this depends on your circumstances. The basic payment for a single claimant, or a joint claim by a couple, of working tax credits is £1,940 for the tax year. You can then receive extra, depending on your circumstances. For example, single parents can receive up to an additional £2,010, on top of the basic £1,940 payment; people who work more than 30 hours a week can receive up to an extra £810; and disabled workers up to £2,970. The average award of tax credit is £6,340 per year. Child tax credit claimants get £545 per year as a flat payment, plus £2,780 per child.

How many people claim tax credits?

About 4.5m people – the vast majority of these people (around 4m) have children.

How much does it cost the taxpayer?

The estimation is that they will cost the government £30bn in April 2015/16. That’s around 14 per cent of the £220bn welfare budget, which the Tories have pledged to cut by £12bn.

Who introduced this system?

New Labour. Gordon Brown, when he was Chancellor, developed tax credits in his first term. The system as we know it was established in April 2003.

Why did they do this?

To lift working people out of poverty, and to remove the disincentives to work believed to have been inculcated by welfare. The tax credit system made it more attractive for people depending on benefits to work, and gave those in low-paid jobs a helping hand.

Did it work?

Yes. Tax credits’ biggest achievement was lifting a record number of children out of poverty since the war. The proportion of children living below the poverty line fell from 35 per cent in 1998/9 to 19 per cent in 2012/13.

So what’s the problem?

Well, it’s a bit of a weird system in that it lets companies pay wages that are too low to live on without the state supplementing them. Many also criticise tax credits for allowing the minimum wage – also brought in by New Labour – to stagnate (ie. not keep up with the rate of inflation). David Cameron has called the system of taxing low earners and then handing them some money back via tax credits a “ridiculous merry-go-round”.

Then it’s a good thing to scrap them?

It would be fine if all those low earners and families struggling to get by would be given support in place of tax credits – a living wage, for example.

And that’s why the Tories are introducing a living wage...

That’s what they call it. But it’s not. The Chancellor announced in his most recent Budget a new minimum wage of £7.20 an hour for over-25s, rising to £9 by 2020. He called this the “national living wage” – it’s not, because the current living wage (which is calculated by the Living Wage Foundation, and currently non-compulsory) is already £9.15 in London and £7.85 in the rest of the country.

Will people be better off?

No. Quite the reverse. The IFS has said this slightly higher national minimum wage will not compensate working families who will be subjected to tax credit cuts; it is arithmetically impossible. The IFS director, Paul Johnson, commented: “Unequivocally, tax credit recipients in work will be made worse off by the measures in the Budget on average.” It has been calculated that 3.2m low-paid workers will have their pay packets cut by an average of £1,350 a year.

Could the government change its policy to avoid this?

The Prime Minister and his frontbenchers have been pretty stubborn about pushing on with the plan. In spite of criticism from all angles – the IFS, campaigners, Labour, The Sun – Cameron has ruled out a review of the policy in the Autumn Statement, which is on 25 November. But there is an alternative. The chair of parliament’s Work & Pensions Select Committee and Labour MP Frank Field has proposed what he calls a “cost neutral” tweak to the tax credit cuts.

How would this alternative work?

Currently, if your income is less than £6,420, you will receive the maximum amount of tax credits. That threshold is called the gross income threshold. Field wants to introduce a second gross income threshold of £13,100 (what you earn if you work 35 hours a week on minimum wage). Those earning a salary between those two thresholds would have their tax credits reduced at a slower rate on whatever they earn above £6,420 up to £13,100. The percentage of what you earn above the basic threshold that is deducted from your tax credits is called the taper rate, and it is currently at 41 per cent. In contrast to this plan, the Tories want to halve the income threshold to £3,850 a year and increase the taper rate to 48 per cent once you hit that threshold, which basically means you lose more tax credits, faster, the more you earn.

When will the tax credit cuts come in?

They will be imposed from April next year, barring a u-turn.

Anoosh Chakelian is deputy web editor at the New Statesman.